A Senate committee next week will take up a potentially far-reaching bill that would make changes in Florida’s property-insurance system.
The Banking and Insurance Committee on Tuesday will consider a measure (SB 76), filed by Chairman Jim Boyd, a Republican from Bradenton, that seeks to reduce attorney fees and litigation in property-insurance disputes and limit the costs of claims for roof damage.
The measure comes after regulators last year signed off on dozens of double-digit rate increases for private insurers and as homeowners’ policies flooded into the state-backed Citizens Property Insurance Corp.
Insurers point to issues such as litigation and a surge in roof claims as helping cause financial problems in the industry. Boyd’s bill, in part, would try to reduce attorney fees by limiting what are known as “contingency risk multipliers.” Florida allows plaintiffs to collect attorney fees when they prevail in cases against insurance companies, with the amounts typically set by a calculation of the number of hours spent on a case and a reasonable hourly rate.
But courts also can approve contingency risk multipliers that increase the fees. Under the bill, however, contingency risk multipliers could only be awarded “in a rare and exceptional circumstance with evidence that competent counsel could not be retained in a reasonable manner.” Also, the bill would try to reduce costs for roof claims by, in part, allowing insurers to use what is described as a “roof surface reimbursement schedule.”
Under the proposal, reimbursements could vary based on ages and types of roofs. For example, insurers would be required to provide full replacement coverage for roofs less than 10 years old. But they would be allowed to provide less coverage for other roofs.
The bill has two committee stops before the Senate floor: Judiciary and Rules are ahead.
There is currently no identical bill in the House.
Republished with permission of the News Service of Florida.